A financing package of up to US$456 million (A$680 million) could be on its way to American Rare Earths Ltd (ASX:ARR, OTCQB:ARRNF) subsidiary Wyoming Rare (USA) Inc to fund the Halleck Creek Project in Wyoming, courtesy of the Export-Import Bank of the United States (EXIM).
Non-binding Letter of Interest
The company has received a non-binding Letter of Interest from EXIM for a potential debt financing package to fund the construction and execution phase of the Cowboy State Mine at Halleck Creek.
EXIM is the official export credit agency of the US Federal Government and the package is part of the government’s Make More In America Initiative, designed to support US exporters and create domestic jobs.
The amount is expected to support the entire initial capital expenditure for the project, with a proposed payback period of 15 years.
The Cowboy State Mine is a critical first step in a multi-phase development of the Halleck Creek deposit, which has the potential to become a multi-generational rare earth resource for the United States.
The project boasts a JORC-compliant resource of 2.34 billion tonnes, containing 7.48 million tonnes of total rare earth oxides, including key magnet metals such as Neodymium (Nd) and Praseodymium (Pr).
Strategic significance
The Letter of Interest underscores the strategic significance of the Halleck Creek project, particularly in light of the global competition for rare earth resources.
EXIM’s involvement could make the project eligible for special consideration under Section 402 of its 2019 reauthorisation, which prioritises projects that advance US leadership in key transformational export areas.
While the Letter of Interest is non-binding, it marks a significant milestone for the project.
EXIM will now begin its due diligence before making any final commitment, while American Rare Earths has committed to updating the market once definitive financing agreements are in place.
CEO Chris Gibbs said: "This Letter of Interest from EXIM Bank is a significant milestone, highlighting the US government’s commitment to securing a robust domestic rare earth supply chain."
Multi-generational resource
“The Halleck Creek project is set to become a key, multi-generational resource for the US, and we are proud to be at the forefront of this transformative initiative," Gibbs added.
“We look forward to collaborating with EXIM and the US government to bring this critical project to fruition.
“The potential funding also paves the way to accelerate offtake agreements and attract strategic investors for our subsidiary, Wyoming Rare (USA) Inc."
WRI president Joe Evers said: "We are grateful for the recognition and support from EXIM Bank, which will be instrumental in securing the funding needed to fast-track the development of this important project."